Sales tax in Ithaca has decreased about $40,000 compared to the same period last year, but Cornell will contribute more

In the earliest months of 2016, sales tax revenue in the city has decreased just over 4 percent — or about $40,000 — compared to the same period last year, continuing a trend from December, where revenues were down 1 percent.

The main culprit, according to the city’s finance office, is falling gas prices.

“It’s not all driven by (gas prices), but I’d say a majority is,” City Controller Steve Thayer said. “Otherwise, I’m not sure exactly what would be causing a decrease.”

Sales tax revenue accounted for approximately 20 percent of city revenues in the 2015 budget last year, aiding a nearly half-million-dollar operating surplus, the city’s first since 2008.

Even though revenues have been down, Thayer said there is room for the city to work.

“We were trying to be conservative in our numbers for 2016, so we’re hoping we’re going to see some kind of turnaround,” Thayer said. “We don’t know if fuel prices will continue to be low for 2016, but right now, they look like they’ll continue to be low for a while. At some point, you’d think consumers have additional spending money, but I’m not sure where that’s coming into place.”

Ithaca’s Finance Department has no knowledge of the specific details of a particular quarter’s results until approximately six months after the quarter has ended, Thayer said, making it difficult to determine the exact source of decreases in sales tax. However, Ithaca’s gas prices — typically ranging between $1.70 and $1.90 per gallon in the city, according to figures from GasBuddy.com — sits below the state’s $1.94 average.

“What else is driving the decrease, I’m not sure,” Thayer said. “Statewide, sales tax is down, so it seems to be an overall trend for the entire state.”

According to Ithaca College department of economics professor Elia Kacapyr, author of the Ithaca economic index, the city fell short of its anticipated growth in 2015, with just over 1 percent less economic activity and 400 fewer jobs countywide than the previous year. Across the board, the Ithaca regional economy finished 2015 with an overall growth rate of about negative 1 percent, an anomaly given 66 percent growth since 1985.

An uptick in the consumer price index means Cornell University, as per its agreement with the City of Ithaca, will increase its annual contribution to the city this year — by one-tenth of a percent, or just under $1,300.